MEDE AMERICA CORPORATION AND ITS SUBSIDIARIES
                 STOCK OPTION AND RESTRICTED STOCK PURCHASE PLAN

                  Section  1.   Purpose.   The  purpose  of  the  MedE   America
Corporation and its Subsidiaries Stock Option and Restricted Stock Purchase Plan
(the "Plan") is to promote the interests of MedE America Corporation, a Delaware
corporation (the "Company"), and any Subsidiary thereof and the interests of the
Company's  stockholders  by  providing  an  opportunity  to selected  employees,
officers and directors of the Company or any  Subsidiary  thereof as of the date
of the adoption of the Plan or at any time  thereafter to purchase  Common Stock
of the  Company.  By  encouraging  such stock  ownership,  the Company  seeks to
attract,  retain and motivate such  employees and other persons and to encourage
such  employees  and other  persons to devote their best efforts to the business
and financial  success of the Company.  It is intended that this purpose will be
effected by the granting of  "non-qualified  stock  options"  and/or  "incentive
stock options" to acquire the Common Stock of the Company and/or by the granting
of rights to purchase  the Common Stock of the Company on a  "restricted  stock"
basis.  Under the Plan,  the  Committee  shall have the  authority  (in its sole
discretion) to grant  "incentive  stock  options"  within the meaning of Section
422(b) of the Code,  "non-qualified  stock  options"  as  described  in Treasury
Regulation Section 1.83-7 or any successor  regulation  thereto,  or "restricted
stock" awards.

                  Section  2.  Definitions.   For  purposes  of  the  Plan,  the
following  terms  used  herein  shall  have  the  following  meanings,  unless a
different meaning is clearly required by the context:

                  2.1.  "Award"  shall  mean an award of the  right to  purchase
Common Stock granted under the provisions of Section 7 of the Plan.

                  2.2. "Board of Directors" shall mean the Board of Directors of
the Company.

                  2.3.  "Code" shall mean the Internal  Revenue Code of 1986, as
amended.

                  2.4.  "Committee"  shall  mean the  committee  of the Board of
Directors referred to in Section 5 hereof;  provided,  that if no such committee
is appointed by the Board of Directors, the Board of Directors shall have all of
the authority and obligations of the Committee under the Plan.







                  2.5.  "Common  Stock"  shall mean the Common  Stock,  $.01 par
value, of the Company.

                  2.6.  "Employee"  shall mean (i) with  respect to an ISO,  any
person,  including,  without limitation,  an officer or director of the Company,
who,  at the time an ISO is granted to such person  hereunder,  is employed on a
full-time  basis by the Company or any Parent or Subsidiary of the Company,  and
(ii) with respect to a Non-Qualified Option and/or an Award, any person employed
by, or  performing  services for, the Company or any Parent or Subsidiary of the
Company, including, without limitation, directors and officers.

                  2.7.  "ISO"  shall  mean an Option  granted  to a  Participant
pursuant  to the Plan that  constitutes  and shall be treated  as an  "incentive
stock option" as defined in Section 422(b) of the Code.

                  2.8.  "Non-Qualified Option" shall mean an Option granted to a
Participant  pursuant to the Plan that is intended  to be, and  qualifies  as, a
"non-qualified  stock option" as described in Treasury Regulation Section 1.83-7
or any successor  regulation thereto and that shall not constitute or be treated
as an ISO.

                  2.9.  "Option"  shall  mean  any ISO or  Non-Qualified  Option
granted to an Employee pursuant to the Plan.

                  2.10.  "Participant"  shall mean any Employee to whom an Award
and/or an Option is granted under the Plan.

                  2.11. "Parent" of the Company shall have the meaning set forth
in Section 424(e) of the Code.

                  2.12.  "Subsidiary"  of the Company shall have the meaning set
forth in Section 424(f) of the Code.

                  Section 3.  Eligibility.  Awards and/or Options may be granted
to any  Employee.  The  Committee  shall have the sole  authority  to select the
persons  to whom  Awards  and/or  Options  are to be granted  hereunder,  and to
determine whether a person is to be granted a Non-Qualified Option, an ISO or an
Award or any combination  thereof. No person shall have any right to participate
in the Plan. Any person selected by the Committee for  participation  during any
one  period  will not by  virtue  of such  participation  have  the  right to be
selected as a Participant for any other period.

                  Section 4.  Common Stock Subject to the Plan.

                  4.1.  Number of Shares.  The total  number of shares of Common
Stock for which Options and/or Awards may be granted under


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the Plan shall not exceed in the  aggregate  Three  Million  One  Thousand  Four
Hundred (3,501,400) shares of Common Stock (subject to adjustment as provided in
Section 8 hereof).

                  4.2.  Reissuance.  The  shares  of  Common  Stock  that may be
subject to Options and/or Awards granted under the Plan may be either authorized
and unissued  shares or shares  reacquired at any time and now or hereafter held
as  treasury  stock  as the  Committee  may  determine.  In the  event  that any
outstanding Option expires or is terminated for any reason, the shares allocable
to the  unexercised  portion  of such  Option  may again be subject to an Option
and/or  Award  granted  under the Plan.  If any shares of Common Stock issued or
sold  pursuant  to an  Award  or the  exercise  of an  Option  shall  have  been
repurchased  by the Company,  then such shares may again be subject to an Option
and/or Award granted under the Plan.

                  4.3.  Special ISO Limitations.

                  (a) The aggregate fair market value (determined as of the date
an ISO is granted) of the shares of Common  Stock with respect to which ISOs are
exercisable  for the first time by an Employee  during any calendar  year (under
all  incentive  stock option plans of the Company or any Parent or Subsidiary of
the Company) shall not exceed $100,000.

                  (b) No ISO shall be granted to an  Employee  who,  at the time
the ISO is granted,  owns  (actually or  constructively  under the provisions of
Section 424(d) of the Code) stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company or any Parent or  Subsidiary
of the Company,  unless (i) the option price is at least 110% of the fair market
value  (determined  as of the time the ISO is  granted)  of the shares of Common
Stock subject to the ISO and (ii) the ISO by its terms is not  exercisable  more
than five years from the date it is granted.

                  4.4.  Limitations Not Applicable to  Non-Qualified  Options or
Awards.  Notwithstanding  any other  provision of the Plan,  the  provisions  of
Sections 4.3(a) and (b) shall not apply, nor shall be construed to apply, to any
Non-Qualified Option or Award granted under the Plan.

                  Section 5.  Administration of the Plan.

                  5.1.  Administration.  The  Plan  shall be  administered  by a
committee of the Board of Directors (the  "Committee")  established by the Board
of Directors and  consisting of no less than three  persons.  All members of the
Committee  shall be  "disinterested  persons"  within the  meaning of Rule 16b-3
promulgated under the Securities Exchange Act of 1934, as amended


                                        3






(the "Exchange Act"). The Committee shall be appointed from time to time by, and
shall serve at the pleasure of, the Board of Directors.

                  5.2.  Grant of Options/Awards.

                  (a)  Options.  The Committee shall have the sole authority and
discretion  under the Plan (i) to select  the  Employees  who are to be  granted
Options hereunder;  (ii) to designate whether any Option to be granted hereunder
is to be an ISO or a  Non-Qualified  Option;  (iii) to  establish  the number of
shares of Common Stock that may be subject to each Option; (iv) to determine the
time and the conditions subject to which Options may be exercised in whole or in
part;  (v) to  determine  the amount (not less than the par value per share) and
the form of the  consideration  that may be used to  purchase  shares  of Common
Stock  upon  exercise  of  any  Option  (including,   without  limitation,   the
circumstances under which issued and outstanding shares of Common Stock owned by
a Participant  may be used by the  Participant  to exercise an Option);  (vi) to
impose  restrictions  and/or  conditions  with respect to shares of Common Stock
acquired upon exercise of an Option;  (vii) to determine the circumstances under
which shares of Common Stock acquired upon exercise of any Option may be subject
to  repurchase  by the  Company;  (viii)  to  determine  the  circumstances  and
conditions  subject to which shares  acquired  upon exercise of an Option may be
sold or otherwise transferred,  including, without limitation, the circumstances
and  conditions  subject  to which a  proposed  sale of shares  of Common  Stock
acquired  upon  exercise of an Option may be subject to the  Company's  right of
first  refusal (as well as the terms and  conditions  of any such right of first
refusal);  (ix) to establish a vesting  provision for any Option relating to the
time when (or the  circumstances  under  which) the Option may be exercised by a
Participant,  including,  without  limitation,  vesting  provisions  that may be
contingent  upon (A) the Company's  meeting  specified  financial  goals,  (B) a
change of  control  of the  Company  or (C) the  occurrence  of other  specified
events;  (x) to accelerate the time when  outstanding  Options may be exercised,
provided,  however,  that any ISOs  shall be  deemed  "accelerated"  within  the
meaning of Section  424(h) of the Code;  and (xi) to establish  any other terms,
restrictions  and/or  conditions  applicable to any Option not inconsistent with
the  provisions  of  the  Plan.  Notwithstanding  anything  in the  Plan  to the
contrary, in no event shall any Option granted to any director or officer of the
Company who is subject to Section 16 of the Exchange Act become exercisable,  in
whole or in part,  prior to the date  that is six  months  after  the date  such
Option is granted to such director or officer.

                  (b) Awards.  The Committee  shall have the sole  authority and
discretion under the Plan (i) to select the


                                        4






Employees who are to be granted Awards  hereunder;  (ii) to determine the amount
to be paid by a  Participant  to acquire  shares of Common Stock  pursuant to an
Award,  which  amount may be equal to, more than,  or less than 100% of the fair
market  value of such  shares on the date the Award is granted  (but in no event
less than the par value of such  shares);  (iii) to determine  the time or times
and the  conditions  subject to which Awards may be made;  (iv) to determine the
time or times and the  conditions  subject to which the  shares of Common  Stock
subject to an Award are to become vested and no longer  subject to repurchase by
the Company; (v) to establish transfer restrictions and the terms and conditions
on which any such transfer  restrictions  with respect to shares of Common Stock
acquired pursuant to an Award shall lapse; (vi) to establish vesting  provisions
with  respect to any  shares of Common  Stock  subject  to an Award,  including,
without  limitation,  vesting  provisions  which may be contingent  upon (A) the
Company's  meeting  specified  financial  goals,  (B) a change of control of the
Company or (C) the occurrence of other specified events;  (vii) to determine the
circumstances  under which shares of Common Stock acquired  pursuant to an Award
may  be  subject  to  repurchase  by  the  Company;   (viii)  to  determine  the
circumstances  and  conditions  subject  to which any  shares  of  Common  Stock
acquired pursuant to an Award may be sold or otherwise  transferred,  including,
without limitation, the circumstances and conditions subject to which a proposed
sale of shares of Common Stock  acquired  pursuant to an Award may be subject to
the Company's right of first refusal (as well as the terms and conditions of any
such right of first refusal);  (ix) to determine the form of consideration  that
may be used to purchase shares of Common Stock pursuant to an Award  (including,
without limitation,  the circumstances under which issued and outstanding shares
of  Common  Stock  owned  by a  Participant  may be used by the  Participant  to
purchase the Common Stock subject to an Award);  (x) to  accelerate  the time at
which any or all restrictions imposed with respect to any shares of Common Stock
subject  to an  Award  will  lapse;  and  (xi) to  establish  any  other  terms,
restrictions and/or conditions applicable to any Award not inconsistent with the
provisions of the Plan.

                  5.3.  Interpretation.  The  Committee  shall be  authorized to
interpret the Plan and may, from time to time, adopt such rules and regulations,
not  inconsistent  with the  provisions of the Plan, as it may deem advisable to
carry out the purposes of the Plan.

                  5.4.  Finality.  The  interpretation  and  construction by the
Committee  of any  provision  of the  Plan,  any  Option  and/or  Award  granted
hereunder  or any  agreement  evidencing  any such Option  and/or Award shall be
final and conclusive upon all parties.


                                        5






                  5.5. Expenses,  Etc. All expenses and liabilities  incurred by
the Committee in the  administration  of the Plan shall be borne by the Company.
The Committee may employ attorneys, consultants, accountants or other persons in
connection with the  administration  of the Plan. The Company,  and its officers
and directors, shall be entitled to rely upon the advice, opinions or valuations
of any such persons.  No member of the Committee shall be liable for any action,
determination or interpretation  taken or made in good faith with respect to the
Plan or any Option and/or Award granted hereunder.

                  Section 6.  Terms and Conditions of Options.

                  6.1.  ISOs. The terms and conditions of each ISO granted under
the Plan shall be  specified by the  Committee  and shall be set forth in an ISO
agreement  between the Company and the Participant in such form as the Committee
shall approve.  The terms and conditions of each ISO shall be such that each ISO
issued  hereunder shall  constitute and shall be treated as an "incentive  stock
option" as defined in Section  422(b) of the Code.  The terms and  conditions of
any ISO  granted  hereunder  need not be  identical  to those of any  other  ISO
granted hereunder.

                  The  terms  and  conditions  of each  ISO  shall  include  the
following:

                  (a) The option price shall be fixed by the Committee but shall
in no event be less than 100% (or 110% in the case of an Employee referred to in
Section  4.3(b)  hereof) of the fair market  value of the shares of Common Stock
subject to the ISO on the date the ISO is granted. For purposes of the Plan, the
fair market value per share of Common Stock as of any day shall mean the average
of the  closing  prices  of sales of  shares  of  Common  Stock on all  national
securities  exchanges on which the Common Stock may at the time be listed or, if
there  shall have been no sales on any such day,  the average of the highest bid
and lowest asked prices on all such  exchanges at the end of such day, or, if on
any  day  the  Common  Stock  shall  not  be  so  listed,  the  average  of  the
representative bid and asked prices quoted in the NASDAQ system as of 3:30 p.m.,
New York  time,  on such day,  or, if on any day the Common  Stock  shall not be
quoted  in the  NASDAQ  system,  the  average  of the high and low bid and asked
prices  on such day in the  over-the-counter  market  as  reported  by  National
Quotation Bureau Incorporated,  or any similar successor organization. If at any
time the  Common  Stock is not listed on any  national  securities  exchange  or
quoted in the NASDAQ  system or the  over-the-counter  market,  the fair  market
value of the shares of Common Stock  subject to an Option on the date the ISO is
granted shall be the fair market value  thereof  determined in good faith by the
Board of Directors.


                                        6






                  (b) ISOs, by their terms, shall not be transferable  otherwise
than  by  will  or  the  laws  of  descent  and  distribution,   and,  during  a
Participant's lifetime, an ISO shall be exercisable only by the Participant.

                  (c) The  Committee  shall  fix the  term of all  ISOs  granted
pursuant to the Plan (including,  without limitation, the date on which such ISO
shall expire and terminate); provided, however, that such term shall in no event
exceed ten years from the date on which such ISO is granted  (or, in the case of
an ISO granted to an Employee  referred to in Section 4.3(b)  hereof,  such term
shall in no event exceed five years from the date on which such ISO is granted).
Each ISO shall be exercisable in such amount or amounts,  under such  conditions
and at such times or intervals or in such installments as shall be determined by
the Committee in its sole discretion;  provided, however, that in no event shall
any ISO  granted to any  director  or officer of the  Company  who is subject to
Section 16 of the Exchange Act become exercisable, in whole or in part, prior to
the date that is six months after the date such ISO is granted to such  director
or officer.

                  (d) To the extent that the Company or any Parent or Subsidiary
of the  Company is required to  withhold  any  Federal,  state or local taxes in
respect of any  compensation  income  realized by any Participant as a result of
any  "disqualifying  disposition"  of any shares of Common Stock  acquired  upon
exercise of an ISO granted hereunder, the Company shall deduct from any payments
of any kind  otherwise  due to such  Participant  the  aggregate  amount of such
Federal,  state or local taxes  required to be so withheld or, if such  payments
are insufficient to satisfy such Federal, state or local taxes, such Participant
will be required to pay to the Company, or make other arrangements  satisfactory
to the Company  regarding payment to the Company of, the aggregate amount of any
such taxes. All matters with respect to the total amount of taxes to be withheld
in respect of any such  compensation  income shall be determined by the Board of
Directors, in its sole discretion.

                  (e) In the sole  discretion  of the  Committee  the  terms and
conditions  of any  ISO  may  (but  need  not)  include  any  of  the  following
provisions:

                  (i) In the event a  Participant  shall cease to be employed by
         the Company or any Parent or  Subsidiary  of the Company on a full-time
         basis  for  any  reason  other  than  as  a  result  of  his  death  or
         "disability"  (within the meaning of Section 22(e)(3) of the Code), the
         unexercised  portion of any ISO held by such  Participant  at that time
         may only be  exercised  within  one  month  after the date on which the
         Participant ceased to be so employed, and only to the extent


                                        7






         that the Participant could have otherwise  exercised such ISO as of the
         date on which he ceased to be so employed.

             (ii) In the event a  Participant  shall cease to be employed by the
         Company or any Parent or Subsidiary of the Company on a full-time basis
         by reason of his  "disability"  (within the meaning of Section 22(e)(3)
         of  the  Code),  the  unexercised  portion  of any  ISO  held  by  such
         Participant  at that time may only be  exercised  within one year after
         the date on which the Participant ceased to be so employed, and only to
         the extent that the Participant could have otherwise exercised such ISO
         as of the date on which he ceased to be so employed.

            (iii) In the event a  Participant  shall die while in the  employ of
         the  Company  or a Parent or  Subsidiary  of the  Company  (or within a
         period of one month  after  ceasing  to be an  Employee  for any reason
         other than his "disability"  (within the meaning of Section 22(e)(3) of
         the  Code) or  within  a period  of one  year  after  ceasing  to be an
         Employee by reason of such  "disability"),  the unexercised  portion of
         any ISO held by such  Participant  at the time of his death may only be
         exercised within one year after the date of such  Participant's  death,
         and  only to the  extent  that the  Participant  could  have  otherwise
         exercised  such ISO at the time of his death.  In such event,  such ISO
         may be exercised by the executor or administrator of the  Participant's
         estate or by any person or  persons  who shall  have  acquired  the ISO
         directly from the Participant by bequest or inheritance.

                  6.2.  Non-Qualified  Options. The terms and conditions of each
Non-Qualified Option granted under the Plan shall be specified by the Committee,
in its sole  discretion,  and shall be set forth in a written  option  agreement
between the  Company and the  Participant  in such form as the  Committee  shall
approve. The terms and conditions of each Non-Qualified Option will be such (and
each  Non-Qualified  Option  Agreement  shall  expressly  so  state)  that  each
Non-Qualified  Option issued hereunder shall not constitute nor be treated as an
"incentive stock option" as defined in Section 422(b) of the Code, but will be a
"non-qualified  stock option" for Federal,  state and local income tax purposes.
The terms and conditions of any Non-Qualified  Option granted hereunder need not
be identical to those of any other Non-Qualified Option granted hereunder.

                  The  terms  and  conditions  of  each   Non-Qualified   Option
Agreement shall include the following:

                  (a)  The  option  (exercise)  price  shall  be  fixed  by  the
Committee  and may be equal to,  more than or less than 100% of the fair  market
value of the shares of Common Stock subject to the


                                        8






Non-Qualified Option on the date such Non-Qualified Option is granted.

                  (b)  The  Committee  shall  fix the  term of all  NonQualified
Options granted pursuant to the Plan (including, without limitation, the date on
which such  Non-Qualified  Option shall expire and terminate).  Such term may be
more than ten years from the date on which such Non-Qualified Option is granted.
Each Non-Qualified Option shall be exercisable in such amount or amounts,  under
such conditions (including, without limitation,  provisions governing the rights
to exercise such NonQualified Option), and at such times or intervals or in such
installments  as shall be determined  by the  Committee in its sole  discretion;
provided, however, that in no event shall any NonQualified Option granted to any
director or officer of the Company who is subject to Section 16 of the  Exchange
Act  become  exercisable,  in whole or in  part,  prior to the date  that is six
months after the date such  Non-Qualified  Option is granted to such director or
officer.

                  (c) Non-Qualified Options shall not be transferable  otherwise
than by will or the laws of descent and distribution, and during a Participant's
lifetime a Non-Qualified Option shall be exercisable only by the Participant.

                  (d) To the extent that the Company is required to withhold any
Federal,  state or local taxes in respect of any compensation income realized by
any  Participant in respect of a  Non-Qualified  Option granted  hereunder or in
respect of any shares of Common Stock acquired upon exercise of a  Non-Qualified
Option,  the Company shall deduct from any payments of any kind otherwise due to
such  Participant  the aggregate  amount of such  Federal,  state or local taxes
required to be so withheld or, if such payments are insufficient to satisfy such
Federal,  state or local taxes,  or if no such payments are due or to become due
to such  Participant,  then,  such  Participant  will be  required to pay to the
Company,  or make  other  arrangements  satisfactory  to the  Company  regarding
payment to the Company of, the aggregate  amount of any such taxes.  All matters
with  respect to the total amount of taxes to be withheld in respect of any such
compensation  income shall be determined by the Board of Directors,  in its sole
discretion.

                  7. Terms and Conditions of Awards. The terms and conditions of
each Award  granted under the Plan shall be specified by the  Committee,  in its
sole  discretion,  and  shall be set forth in a written  agreement  between  the
Participant and the Company,  in such form as the Committee  shall approve.  The
terms and  provisions  of any Award granted  hereunder  need not be identical to
those of any other Award granted hereunder.


                                        9






                  The terms and  conditions  of each  Award  shall  include  the
following:

                  (a) The  amount to be paid by a  Participant  to  acquire  the
shares of Common Stock  pursuant to an Award shall be fixed by the Committee and
may be equal to,  more than or less  than 100% of the fair  market  value of the
shares of Common  Stock  subject  to the Award on the date the Award is  granted
(but in no event less than the par value of such shares).

                  (b) Each Award shall  contain  such vesting  provisions,  such
transfer  restrictions  and  such  other  restrictions  and  conditions  as  the
Committee, in its sole discretion, may determine, including, without limitation,
the  circumstances  under which the  Company  shall have the right and option to
repurchase shares of Common Stock acquired pursuant to an Award.

                  (c) Stock  certificates  representing  Common  Stock  acquired
pursuant to an Award shall bear a legend referring to any  restrictions  imposed
on such Stock and such other matters as the Committee may determine.

                  (d) To the extent that the Company is required to withhold any
Federal,  state or local taxes in respect of any compensation income realized by
the  Participant  in respect of an Award  granted  hereunder,  in respect of any
shares  acquired  pursuant to an Award, or in respect of the vesting of any such
shares of Common  Stock,  then the Company shall deduct from any payments of any
kind  otherwise due to such  Participant  the aggregate  amount of such Federal,
state or  local  taxes  required  to be so  withheld,  or if such  payments  are
insufficient  to  satisfy  such  Federal,  state or local  taxes,  or if no such
payments  are due or to become due to such  Participant,  then such  Participant
will be required to pay to the Company, or make other arrangements  satisfactory
to the Company  regarding payment to the Company of, the aggregate amount of any
such taxes. All matters with respect to the total amount of taxes to be withheld
in respect of any such compensation income shall be determined by the Committee,
in its sole discretion.

                  Section  8.  Adjustments.  (a) In the  event  that,  after the
adoption of the Plan by the Board of Directors,  the  outstanding  shares of the
Company's  Common  Stock shall be  increased  or  decreased  or changed  into or
exchanged for a different  number or kind of shares of stock or other securities
of  the  Company  or  of  another  entity  through  reorganization,   merger  or
consolidation,   recapitalization,   reclassification,  stock  split,  split-up,
combination  or exchange of shares or  declaration  of any dividends  payable in
Common Stock, the Board of Directors shall  appropriately  adjust (i) the number
of shares of Common Stock (and the option price per share) subject to the


                                       10






unexercised  portion of any  outstanding  Option (to the nearest  possible  full
share); provided, however, that the limitations of Section 424 of the Code shall
apply with  respect to  adjustments  made to ISOs,  (ii) the number of shares of
Common Stock to be acquired  pursuant to an Award which have not become  vested,
and (iii) the number of shares of Common Stock for which  Options  and/or Awards
may be granted  under the Plan,  as set forth in Section  4.1  hereof,  and such
adjustments shall be effective and binding for all purposes of the Plan.

                  (b) If any capital  reorganization or  reclassification of the
capital stock of the Company or any  consolidation or merger of the Company with
another entity,  or the sale of all or  substantially  all its assets to another
entity,  shall be effected in such a way that  holders of Common  Stock shall be
entitled to receive  stock,  securities or assets with respect to or in exchange
for Common Stock,  then, subject to Section 8(c) below, each holder of an Option
shall thereafter have the right to purchase,  upon the exercise of the Option in
accordance  with the terms and  conditions  specified  in the  option  agreement
governing  such  Option  and in lieu of the shares of Common  Stock  immediately
theretofore  receivable upon the exercise of such Option,  such shares of stock,
securities or assets (including,  without limitation,  cash) as may be issued or
payable  with respect to or in exchange  for a number of  outstanding  shares of
such Common Stock equal to the number of shares of such Common Stock immediately
theretofore   so   receivable   had   such   reorganization,   reclassification,
consolidation, merger or sale not taken place.

                  (c) Notwithstanding Section 8(b) hereof (but only if expressly
provided in any option  agreement),  in the event of (i) any offer to holders of
the  Company's  Common Stock  generally  relating to the  acquisition  of all or
substantially  all of  their  shares,  including,  without  limitation,  through
purchase,  merger  or  otherwise,  or (ii) any  proposed  transaction  generally
relating to the  acquisition of  substantially  all of the assets or business of
the Company (herein  sometimes  referred to as an  "Acquisition"),  the Board of
Directors may, in its sole discretion, cancel any outstanding Options (provided,
however,  that the  limitations  of  Section  424 of the Code  shall  apply with
respect to adjustments made to ISO's) and pay or deliver, or cause to be paid or
delivered,  to the holder thereof an amount in cash or securities having a value
(as  determined  by the Board of  Directors  acting in good faith)  equal to the
product of (A) the number of shares of Common Stock (the "Option  Shares") that,
as of the date of the  consummation  of such  Acquisition,  the  holder  of such
Option had become entitled to purchase (and had not purchased) multiplied by (B)
the  amount,  if any,  by which (1) the formula or fixed price per share paid to
holders of shares of Common Stock pursuant to such  Acquisition  exceeds (2) the
option price applicable to such Option Shares.


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                  Section  9.  Effect  of the Plan on  Employment  Relationship.
Neither the Plan nor any Option and/or Award granted  hereunder to a Participant
shall be construed as conferring upon such  Participant any right to continue in
the employ of (or otherwise  provide  services to) the Company or any Subsidiary
or Parent  thereof,  or limit in any  respect  the right of the  Company  or any
Subsidiary or Parent thereof to terminate such Participant's employment or other
relationship  with the Company or any Subsidiary or Parent,  as the case may be,
at any time.

                  Section 10.  Amendment of the Plan. The Board of Directors may
amend the Plan from time to time as it deems desirable; provided, however, that,
without the  approval of the  holders of a majority of the  outstanding  capital
stock of the Company entitled to vote thereon or consent  thereto,  the Board of
Directors  may not amend the Plan (i) to increase  (except for  increases due to
adjustments in accordance with Section 8 hereof) the aggregate  number of shares
of Common Stock for which Options and/or Awards may be granted  hereunder,  (ii)
to decrease the minimum  exercise price specified by the Plan in respect of ISOs
or (iii) to change the class of  Employees  eligible  to receive  ISOs under the
Plan.

                  Section 11.  Termination  of the Plan.  The Board of Directors
may terminate the Plan at any time.  Unless the Plan shall theretofore have been
terminated by the Board of Directors,  the Plan shall  terminate ten years after
the date of its initial  adoption by the Board of  Directors.  No Option  and/or
Award may be granted hereunder after termination of the Plan. The termination or
amendment of the Plan shall not alter or impair any rights or obligations  under
any Option and/or Award theretofore granted under the Plan.

                  Section  12.  Effective  Date of the Plan.  The Plan  shall be
effective  as of March 22,  1995,  the date on which the Plan was adopted by the
Board of Directors of the Company.

                                    * * * * *



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